Prosecution of tax crimes on the rise

On behalf of Levins Tax Law, LLC posted in Tax Crimes on Friday, February 7, 2014.

Massachusetts taxpayers may be interested in the latest statistics on the Obama administration's stance on income tax crimes. As instances of tax refund and other fraud are rising, the Justice Department is doing its part to keep up.

Since the Obama administration assumed office in 2009, the average annual number of prosecutions for tax crimes has risen. A new report from the Transactional Records Access Clearinghouse, a non-partisan research group that obtained its data through Freedom of Information Act requests, shows that the Obama administration has prosecuted an average of 1,568 cases each year, in contrast to the Bush administration's average of 1,303 prosecutions per year. Most of these cases involve either tax evasion or allegations of fraud.

In addition, the number of total recommendations of tax cases that the Internal Revenue Service makes to the Justice Department has risen under the Obama administration. Compared to Bush's tenure in the presidency, case recommendations have increased by 23.4 percent. The co-director of TRAC says that this increase indicates a tough attitude toward tax evasion, despite cuts to the Service's budget. Last year, the Justice Department sought to prosecute more than 2,000 cases, which is the highest number since 1997.

One reason for the high numbers could be that the recent surge in tax return fraud activity, largely based upon identity theft and other illegitimate documentation. The criminal consequences of federal tax crimes can be extremely serious, particularly if the charges are not properly defended. An attorney with experience defending a person charged with tax crimes may be able to help reduce or eliminate penalties, either through plea bargaining, settlement or vigorous defense.

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